Social Rented Housing: Construction

Lord Bourne of Aberystwyth Excerpts

Thursday 26th October 2017 Lords Chamber

[Lord Greaves (LD)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and remind the House of my interest as a district councillor.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, we are keen for local authorities and other social landlords to build more homes. That is why we have recently announced an additional £2 billion increase in the affordable homes programme to more than £9 billion for affordable housing, including social rents. We have also provided rental certainty for social housing from 2020, which will enable social landlords to plan their homebuilding programmes more effectively. Nevertheless, we continue to be open to dialogue with our local authority partners about any constraints holding them back.

[Lord Greaves]

My Lords, at the weekend the Communities Secretary said that the Government should borrow a lot more money in order to build between 275,000 and 300,000 houses a year in England alone. Since then, the Chancellor said in reply to my right honourable friend Vince Cable in the House of Commons that this was not government policy. Do we still have collective Cabinet responsibility in this country, or do we have a system in which Cabinet Ministers simply debate with one another in public?

[Lord Bourne of Aberystwyth]

My Lords, I remind the House of the commitment of the Government to build 1 million more new homes by 2020 and an additional half a million by 2022. In pursuance of that, we look at the borrowing capacity of local authorities. They currently have £3.6 billon of housing revenue account headroom available. We increased the borrowing capacity by £300 million in 2013, of which only £144 million has been taken up. As I have said, we remain open to discussing this matter and indeed do so with our local authority partners.

[Lord Deben (Con)]

Will my noble friend accept that we are building almost all our houses to a standard which means that they will have to be retrofitted because the energy efficiency is so low? Will he give a commitment that those 1 million houses will be built to a standard which enables people to afford to heat them, because we have started off in the right way instead of having to do it afterwards?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend is very well versed in these matters—few people in the House have more experience than him—and I know that we worked closely together when I was in another department in relation to climate change. It is true that retrofitting is a large part of what is happening at the moment; it is also true that we must seek to minimise the need for retrofitting based on present experience and knowledge. Nevertheless, there is a massive backlog of retrofitting that will keep us very busy for a long time in order that we meet those important climate change targets which the Government are determined we hit.

[Lord Kennedy of Southwark (Lab)]

My Lords, I refer the House to my interests in the register, particularly as a councillor in the London Borough of Lewisham and as a vice-president of the LGA. Yesterday, the Minister’s noble friend Lord Young of Cookham, replying to a question from my noble friend Lord Beecham, said that,

“there are circumstances in which we would consider lifting the local authority borrowing restrictions”.—[Official Report, 25/10/17; col. 935.]

What are those circumstances?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend Lord Young is absolutely right: of course there are circumstances. As I have indicated on two occasions this morning, we are discussing with local authorities the headroom available. Obviously, that depends on circumstances; they differ very much from area to area. We have reached a good agreement with the London mayor and the GLA, but there may be such circumstances and we will react to them. It is a pragmatic approach and not an ideological one.

[Lord Scriven (LD)]

My Lords, I refer to my interests in the register, particularly as a member of Sheffield City Council and a vice-president of the LGA. The £2 billion that the Minister referred to will on average build 11 new council homes in each local authority area each year. As it is estimated that 85,000 council houses per year will need to be built by local authorities, this will not solve the housing crisis. What new powers and borrowing powers will the Government give to local authorities to deal with the housing crisis?

[Lord Bourne of Aberystwyth]

My Lords, in relation to the £2 billion the noble Lord mentioned, obviously we will come forward with additional information on how that money is to be deployed; much of it will be for social rent, but it is an additional amount, as he rightly says, on the affordable housing budget. Nobody is suggesting that there is a single silver bullet here. There is much ground to be made up, as my right honourable friend the Secretary of State has made absolutely clear. However, we have considerable powers, as shown in the White Paper, which we will be exercising through, in many cases, secondary legislation. We have infrastructure money that we have invested. We have money releasing funding for separate pieces of land. We are doing bespoke deals with local authorities, such as Leeds, Manchester and the West Midlands. We are using many different weapons in the armoury, but I agree with the noble Lord that there is no single silver bullet. That is certainly the case.

[Baroness Eaton (Con)]

My Lords, can the Minister tell me what evidence there is to show that Her Majesty’s Government are making affordable housing a priority?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend will be very much aware, because she takes a great interest in these things, that there is considerable evidence of that, as I have just demonstrated in relation to the White Paper: a £2.3 billion housing infrastructure fund; a £45 million land release fund; money going to build to rent, which will be announced in the new year; bespoke housing deals with Leeds, Manchester and the West Midlands, which are well progressed, and others; garden cities and towns that will be coming forward shortly and are very much instrumental; as I have indicated, additional money is going into the affordable housing budget; and a planning fees increase will be brought in by the end of the year that will give more money to planning departments, which will help local authorities. So, there is no shortage of energy and successful action in tackling this deep-seated problem.

[Lord Alton of Liverpool (CB)]

My Lords, will the Minister tell the House what part low-cost homes for sale, self-builds, housing co-operatives and housing renewal of dilapidated properties—that can be maintained and kept for the future if properly renovated—are playing in the Government’s strategy?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is right that those are instrumental. If I could take one to tell him about: on self and custom builds, local authorities are very much being encouraged to progress that. They are being obliged to; they have to keep a register in relation to right to build, which we are very keen on. He is right to signal those as important. In order to give him a fuller answer, I will write to him on all of those points, if I may, and put a copy in the Library.

Grenfell Tower

Lord Bourne of Aberystwyth Excerpts

Thursday 19th October 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given by my right honourable friend the Secretary of State for Communities and Local Government to an Urgent Question in another place on Grenfell Tower. The Statement is as follows:

“My Lords, it is now just over four months since the tragedy of Grenfell Tower. Since then the Government, local council and wider public sector have been working hard to ensure that everyone affected by the fire gets the support they need and that tall residential buildings across the country are safe.

Since I last updated the House on 5 September, the number of households seeking rehousing has risen to 202. As before, this increase has been caused by members of larger households choosing to be rehoused separately. The local council has now secured more than 200 suitable local permanent properties. Negotiations are under way on others, and by Christmas it expects to have over 300 available. As of this week, 112 households have accepted an offer of either temporary or permanent accommodation. Of these, 58 have moved in—44 into temporary accommodation and 14 into permanent accommodation.

The Government are determined that everyone who needs support gets it, regardless of their immigration status. We have previously established a process to grant foreign nationals who were resident in Grenfell Tower or Grenfell Walk 12 months’ leave to remain in the country, with full access to relevant support and assistance. Last week, the Immigration Minister announced that there will be a dedicated route to permanent residency for these survivors. This policy will allow them to apply, for free, for two further periods of two years’ limited leave. After this time, they will be able to apply for permanent residence.

Meanwhile, our work to ensure the safety of other tall residential buildings continues. One hundred and sixty-nine high-rise social housing buildings in England feature some form of aluminium composite material cladding. Our programme of testing has identified 161 that are unlikely to meet current fire safety standards. The particular focus of current work is now on supporting remediation work in these 161 buildings. Additionally, we are improving our understanding of the situation for privately owned high-rise residential buildings with ACM cladding so that all such buildings are as safe as they can be. We have been clear with councils and housing associations that we expect them to fund measures that they consider essential to make a building safe. However, if councils have concerns, they should get in touch with us. We will consider the removal of financial restrictions if they stand in the way of essential work. To date, 31 local authorities have expressed concern in principle to us. We have liaised more closely with six of these, and one of them has now submitted supporting evidence for consideration by my department”.

[Lord Kennedy of Southwark (Lab)]

My Lords, I thank the noble Lord, Lord Bourne, for repeating the Answer to the Urgent Question asked in the other place. I remind the House of my entry in the register of Members’ interests. I pay tribute to the work that continues to be delivered on the ground by public sector staff across a variety of disciplines and by charities, faith groups and volunteers.

The noble Lord has just said that the Government expect councils and housing associations to fund the work they consider essential to make buildings safe, that councils should get in touch with the Government and that the Government will consider removing financial restrictions if they stand in the way of essential works. That is slightly different from where we were four months ago, when I think it was said that money was no object. Therefore, does it follow that the Government are saying that they will not provide any grant funding to fund these essential works? Can the noble Lord be very clear on that? What are the Government actually saying? They seem to have moved a little on that over the last four months. We need to be clear what they are going to do on funding works—or not.

[Lord Bourne of Aberystwyth]

I thank the noble Lord for his thanks to the public sector staff and very much echo those on behalf of the Government. Emergency staff, central government staff and local government staff have performed absolutely magnificently, and continue to do so around the clock. That is particularly true of staff in the National Health Service as well, who provide care for people suffering from emotional distress and others. I thank, as did the noble Lord, charities and the many volunteers for the work they have done. I also thank the public for their generous giving.

The noble Lord asked a specific question about the building works. We have been clear that the safety of buildings subject to these checks post Grenfell, whether in the public or the private sector, is absolutely paramount. We have said that we will ensure that financial restrictions will not be a barrier to essential work being carried out. That would mean, most typically, the lifting of borrowing restrictions on councils. That is what we have in mind. As I have indicated, 31 authorities have been in touch with us—we have been very clear about this and have encouraged local authorities to take up this offer, if appropriate. Six have issues that we wish to pursue, one has completed—I think, from memory, that it is Portsmouth—and we are looking at that now. I repeat that financial restrictions will not limit essential work post Grenfell.

[Lord Shipley (LD)]

My Lords, I echo the comments of the noble Lord, Lord Kennedy, on the vital role of public sector staff, who have done a magnificent job. I had not realised until a couple of weeks ago that a large number of people from all over the United Kingdom have assisted at Grenfell. We should note that contribution in what has been a very difficult time for everybody.

I wish to ask the Minister two specific questions. First, the Statement makes it clear that the Government expect councils and housing associations to fund measures that they consider essential to make a building safe. But what if the Hackitt review says that such works are essential? Will the Government step in at that point? As I understand it, there will be an interim report from the Hackitt review some time during the autumn, which may well make clear statements about what should be done.

Secondly, sprinklers have been required since 2007 in all new high-rise buildings in England over 30 metres, whereas in Scotland, the relevant height is 18 metres. Will the Minister explain why that is the case? Do the Government expect that sprinklers will be retrofitted in buildings constructed prior to 2007?

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord, Lord Shipley, for what he said about the work carried out by the public sector. I certainly echo his thanks to people from throughout the country who have come to help at Grenfell on a voluntary basis. That shows our country at its very best.

The noble Lord asked about essential work and sprinklers. I think he raised a similar point somewhat earlier in relation to the Hackitt review. As I said then, having set up the review to look at building regulations and fire safety—it will obviously look at sprinklers, and the inquiry will doubtless want to look at that as well—I do not think we should prejudge what it will come up with. If it recommends that something essential be done, clearly, the Government will take that very seriously—I cannot imagine it being otherwise—and that would include points relating to retrofitting.

On the difference with Scotland and the devolution element, I know from a previous life that if you have devolved systems, policies may diverge, sometimes for very good reasons. Therefore, I will not tread on any toes by pontificating on something I am not clear about, except to say that these things are sometimes quite different.

[Lord Beecham (Lab)]

My Lords, Newcastle is not the only city or place where in recent years a huge number of newly built multi-storey buildings have been constructed to house students. Do the Government have a view on requiring the builders of those buildings to ensure that they also check issues concerning cladding and sprinklers? In respect of the latter, I endorse the plea of the noble Lord, Lord Shipley. I hope the Government decide that it should be a requirement to install sprinklers. If so, I hope they will ensure that they provide appropriate finance, and that this will not simply fall on local council residents.

[Lord Bourne of Aberystwyth]

I thank the noble Lord, Lord Beecham, for that point about Newcastle and more generally on higher education. I can confirm that some higher education and further education blocks—on which I think we have published statistics—also fall foul of these concerns, and they are being looked at in exactly the same way. That is also true of one or two buildings in the health service. It does not extend more widely in other areas of government, at least not in England; separate considerations and reviews are going on in Scotland, Wales and Northern Ireland. I reiterate that we have set up the Hackitt review, which is looking at building regulations and fire safety, including sprinklers, for the specific reason that we want it to come up with evidence-based recommendations. We should not anticipate those, but I can confirm that, obviously, whatever it comes up with—this goes for the inquiry as well—will be taken seriously by the Government, and, no doubt, by opposition parties as well.

[Baroness Verma (Con)]

My Lords, moving away from building work, can my noble friend say whether the people of Grenfell are getting the emotional support that they require as they go through this difficult time? In addition, will he ensure that young people and children in particular are being well looked after, especially with regard to their needs during their time at school?

[Lord Bourne of Aberystwyth]

I think my noble friend for that sensitive and appropriate question. It is obviously a massive concern. NHS experts estimate that 50% or more of the people who survived the fire are expected to display symptoms of post-traumatic stress disorder. NHS teams are providing the screening close to Grenfell at the Bard Road centre, and we are also providing support and counselling through the night with volunteers at the Notting Hill Methodist Church and at a number of hotels. It is obviously a serious issue, but I hope and believe that we are addressing it. My noble friend also mentioned young people. This is certainly a subject of great hope, and it is to our great credit that we have been able quickly to open a temporary school to substitute for the one we lost. It seems to be performing magnificently. Once again, I pay tribute to all the people who made that happen.

District Councils

Lord Bourne of Aberystwyth Excerpts

Thursday 19th October 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I thank the noble Lord, Lord Greaves, for moving this debate and outlining the importance of district councils, the range of services that they cover, the area coverage and the trusted, familial and responsive nature of district councils, as well as for the energetic way in which he always represents the best interests of Pendle, which came across again today.

In trying to set the scene for this debate, I have to say that even I noted perhaps a slight tension, a frisson, between the opposition parties—a hint of disagreement from the noble Lord, Lord Beecham, for example, which was uncharacteristic. Let us reflect on where we are with this. I do not think there is any question that we would all wish to spend more in local government but we all have a responsibility, which came across earlier this week, on intergenerational fairness. At the moment, we are still running a considerable deficit. There has been a lot of talk of cuts and so on, but noble Lords should cast their minds back. As the noble Lord, Lord Shipley, referred to, when the coalition Government came in in 2010 there was a dreadful financial position. That has been ameliorated, but we are not out of the woods yet. Those parties and individuals who understandably want to spend more money have a duty to tell us where that money would come from. Would it come from increased borrowing, taxation or a combination of the two?

[Baroness Pinnock]

Stop Brexit.

[Lord Bourne of Aberystwyth]

I think I heard a murmur that it could come from cancelling Brexit. If people are suggesting that, they had better tell us how they are going to go about doing it. There are some serious fundamental issues lying behind any increase in spending.

That said, we have councils up and down England providing essential services to millions of people. I know district councils in particular are at the front line of our democracy; they play a vital role in our society. As I say, they are familial, trusted and, obviously by their very nature, local. They are responsible for providing housing, collecting local taxes, protecting our environment and shaping our community. District councils provide these services, and they are services that people value and depend on on a daily basis.

I am grateful to some noble Lords for indicating that there are ways in which local government can save money, and indeed has done, by the merger, sometimes voluntary, into unitary councils. The noble Lord, Lord Shipley, referred to this. Sharing back-office functions sometimes makes sense. The noble Baroness, Lady Pinnock, mentioned, perhaps critically, rationalisation of waste collection. This is often a sensible way to save money, not something that is necessarily bad news. We have to look at what is proposed.

We also need to put it in context. In the 2015 spending review, the Government delivered £200 billion for local government—a significant amount—and in 2016 we provided an unprecedented four-year financial settlement offer, which 97% of all local authorities accepted. We did this because local government was asking for certainty, and we recognise the need for that; that is absolutely right and fair. The settlement will see a modest increase in funding in cash terms—in cash terms, I acknowledge—over the period covered and, as I said, we still face a challenging national debt which is at nearly 90% of our GDP. Nevertheless, the settlement is designed to ensure that councils have the right level of funding for the most important services that they offer. The noble Lord, Lord Shipley, referred to the challenge of rurality. The settlement includes a dedicated grant worth more than £260 million for rurality.

We are in the second year of that multi-year offer, and we recently published a consultation on our approach to the third year. This includes—something that was touched on—a commitment to continuing the reforms to the new homes bonus, as laid out last year, and the social care challenge. The noble Lord, Lord Kennedy, rightly recognised the size of that challenge. He said that it might lead to increasing costs; I do not think there is any doubt about that, as it certainly will. He is absolutely right that we should welcome the fact that people are living longer, but it means additional costs to the health service and social budgets. That represents a challenge, which the Government are looking at, and we will bring forward proposals on how to face it. I think that there is recognition around the House that this problem is faced by the country, and we need to square up to that challenge as a country. I am sure that we will be able to work together on it.

The new homes bonus—to return to it—has been successful so far. It has allocated more than £6 billion, reflecting more than 1.2 million new homes. People have referred to the importance of new housing, and I will deal with some of the specific issues raised later. The council of the noble Lord, Lord Greaves, Pendle, is set to receive more than £4.5 million over the course of the Parliament, around 13% of its total core spending, but we need to explore every possible option to support the creation of even more homes for our communities. The Government continue to be committed to incentivising local authorities to support housing growth in their areas; it is something we value. This is why we are currently consulting on a methodology for reducing payments for new homes where planning permission is later granted on appeal. That seems to us to be the right thing to do. Decisions on any changes will be made in light of this consultation, and, as I said, we will be bringing forward our proposals.

When it comes to increasing our country’s housing supply, we stand behind local government. The new homes bonus is one way in which we do this, but there are others, and we know that we need councils to continue to deliver. We have introduced our new £2.3 billion housing infrastructure fund for all councils to bid into, and we have already committed more than £1.7 billion of the home building fund, which will deliver more than 100,000 homes and create thousands of new jobs.

We are also engaging in bespoke deals, which are progressing in, for example, Leeds, Manchester and the West Midlands. I think a specific question was asked about the £2 billion additional money that has been announced. I said earlier this week, I think, but I am happy to restate it, that we will be bringing forward our specific proposals as to how that money is to be spent and, of course, a great deal of it will be on social housing. We will publish those proposals.

District councils play a particularly vital role as local planning authorities, and reference was made to planning departments. The noble Baroness, Lady Maddock, the noble Lords, Lord Beecham and Lord Kennedy, and others spoke of the importance of ensuring that we deliver on the 20% increase, which was referenced in the housing White Paper. I apologise for again restating a policy that has already been announced, which is something I was criticised for, but I have been asked what we are doing on it and I can say that we will be delivering on that 20% additional fee by the end of the year. That has been broadly welcomed, and I am glad that we are able to deliver on it. All planning authorities have accepted and confirmed that they will ring-fence the additional income for investment and planning. We are also, as noble Lords will be aware, consulting on options to go further and to allow an increase of another 20% for those authorities delivering on their housing need, thus coupling additional money for planning departments with increased housing supply, which I know is something noble Lords understandably are keen on.

Reference was made to energy efficiency by the noble Baroness, Lady Maddock, and I know she does great work on this—we engaged together on this area when I was in a previous role on climate change—and the noble Lord, Lord Shipley, also talked about energy efficiency standards. I will ensure that a copy of this debate is passed to BEIS, which leads on energy efficiency, but much is happening through product regulations and through the action of the market on things, such as cars and so on, in reductions of carbon. We published last week The Clean Growth Strategy, setting out proposals for decarbonising all sectors of the economy, so that is happening, too.

Looking to the future, we have ambitious plans for the local government funding system. Questions were asked about this. We are committed to our manifesto pledge to give councils even greater control of the money they raise locally. We will press on with these reforms to increase business rates retention. I think it was the noble Lord, Lord Beecham, who asked about smoothing mechanisms to make sure there was a fairness element. Of course, that will be inherent in it.

I know from the current retention scheme that Pendle benefits, as does Lancashire generally, from the Lancashire business rate pool. Pendle is forecast to increase its business rate income above its baseline level by more than 10%. This year, Lancashire’s business rate pool members will have an estimated extra income of £9.8 million. We want to increase further that reward for growth.

In September, we published a prospectus for a new tranche of pilots for 100% business rates retention. I urge members to participate in that—applications for the pilots close on Friday 27 October, which is a week tomorrow, and there are five spaces. We launched the prospectus, as I said, in September, and that would be for 100% business rates retention, so it may well be of interest to district councils. From next year, successful applicants will run alongside the current five pilots. These authorities will be able to keep even more of the growth in their business rates income, with no impact on the rest of their funding. They can use that growth to invest or spend on services. Our pilots will be invaluable in testing our reforms to ensure an outcome which delivers for the whole of England. So those pilots are extremely important.

We have recently relaunched our steering group, looking at how we progress business rates retention beyond the current level independently of those pilots. My department co-chairs the steering group with the LGA to look at ways to move forward without primary legislation. We can certainly achieve much by secondary legislation, and we will come forward with suggestions and publish them. We are analysing more than 200 responses to a further consultation on business rates retention, and I want to thank those who participated.

I shall touch on two related matters, if I may, which are not directed specifically laser-like at local government finance but which certainly have an impact on it. One of those is coming up next week—the Committee stage of the Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill, which is related to relief for fibre. It has broad support throughout the House. There are some issues that we will need to work through, but it is something that will help. Just to take Pendle as an example, it currently has only 0.05% full-fibre coverage, so that is something that Pendle and many other areas would expect to benefit from.

Many of the contributions were in the context of the north, so I should also mention the opportunities that are provided by the northern powerhouse, which is particularly the case in Lancashire. We have created a network of growth hubs—for example, Lancashire’s hub has over 3,000 local SMEs and has created more than 1,300 new jobs in its first three years. It has run in tandem with growth investment into the Lancashire local enterprise partnership. So to get the full picture, it is right that we look at those things as well, and at specific local projects. The Burnley-Pendle growth corridor, for example, has funding of £8 million for a transport and highways improvement scheme. We want to unlock growth in all sorts of ways—some through local government and some elsewhere.

I shall turn briefly to the fair funding review, which I think was not touched on. I should like to set out where we are on that review and in that cycle. It is going to redesign the way in which we determine local government’s relative needs, and set new baseline allocations. It is over a decade since the current formula was looked at thoroughly; indeed, some parts of it date back to 1991. Since then, the demographic make-up of many areas, such as those we have talked about, including Northumberland and Pendle, has altered radically. An ageing population, as the noble Lord, Lord Kennedy, said, means demand for different services has shifted within areas. We are entering a world in which local government spending is funded by local resources, as I have indicated, with business rates retention, not through central government necessarily.

The fair funding review will consider how to introduce a more up-to-date and more transparent needs assessment formula. We need to make sure that it works for all local authorities, wherever they are. Rural councils, for example, or areas which struggle with higher levels of deprivation, will have unique needs that have to be met. That has to be recognised. To get this right, we are working collaboratively with local government at every step of the way. We have a strong relationship with the LGA, with which we chair a working group, which is progressing matters. Last year we conducted a call for evidence, which drew over 200 responses. We plan to consult again soon, and we will make sure that it is a thorough, evidence-based review. It should be fully effective by 2021.

There were some specific questions from the noble Lord, Lord Beecham, to which I shall respond in writing—and I shall copy other noble Lords in. As is my customary practice, I shall ensure that a circular letter is sent around to noble Lords to pick up any points that I miss, with copies also placed in the Library.

We recognise the vital and ongoing importance of district councils. We wish to work with district councils; they are our partners, and we have shared ambitions with them. We recognise the challenges, and I fully recognise and wish to place on record the debt that the Government have to our partners in working with us to ensure that we continue to bear down on some of the costs involved while providing excellent services. There are challenges but, as I have indicated, there are mechanisms that we are looking at in terms of business rate retention and some of the specific funds and matters to which I have referred. As I say, the fair funding review will help to equalise within different councils some of the distortions that currently apply.

With that, and with the assurance that, if there are any other points that I have missed I shall certainly pick them up on the write-around, I again thank the noble Lord, Lord Greaves, for bringing this important topic to the House and airing it as effectively as he has done.

Property Agents: Registration

Lord Bourne of Aberystwyth Excerpts

Wednesday 18th October 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

With the leave of the House, I shall now repeat a Statement made in another place by the Minister for Housing in the other place. The Statement is as follows:

“With permission, Mr Speaker, I would like to make a Statement on a call for evidence on protecting consumers in the letting and management agents market. When our Housing White Paper was published in February, we committed to taking action to help people already on the property ladder or living in rented accommodation. The Prime Minister has also announced billions of pounds of funding for new affordable homes, including homes for rent. We are also taking action to create a fairer property management system that works for everyone. We have already announced plans to regulate letting agents, including banning fees for tenants, and we have made it clear that we want to see an end to the unjustified use of leasehold in new-build houses.

The time has now come to address service charges. As the number of leasehold and private rented homes has grown, so the market for managing agents has boomed. According to one estimate, annual service charges alone now total as much as £3.5 billion. While these managers provide an important service, the system in which they work is simply not suited to the modern age. Tenants and leaseholders, even some freeholders on new-build estates, hand over their money and receive services in return, but they have little or no say over which agent provides them or at what cost. This matters because, while the majority of agents are honest professionals committed to delivering a high standard of service, a near-total lack of regulation has led to the growth of a market where, in places, standards and safety come second to the pursuit of profit. We have seen reports of broken windows being repaired with cardboard and sticky tape, and of damp and mould simply being painted over. One landlord was billed £500 by his agent for repairing a shower door, while a group of leaseholders were charged 10 times the market rate to have a new fire escape fitted, with the £30,000 contract for the work being handed to the property owner’s brother.

You do not need any qualifications, training or experience to call yourself an agent. You do not need a criminal record check, and you do not even have to know what a managing agent does, so it is no surprise that some experts believe that such agents are overcharging by as much as £1.4 billion every year.

Today, we are setting out plans for fixing the problems in property management. We are publishing a call for evidence which outlines the challenges facing the sector, proposes some possible solutions, and asks for the views of the people who know the market best—people who work in it or who pay the service charges. As part of this new call for evidence, government is seeking views on three key elements: first, whether regulatory overhaul of the sector is needed; secondly, measures to protect consumers from unfair costs and overpriced service charges; thirdly, ways to place more power in the hands of consumers by giving leaseholders more say over who their agent is.

The sector has done some good work to raise standards already, but there is more to do to professionalise the sector and root out poor practice. Through the call for evidence, we shall take views on whether we need an independent regulator to oversee property management. So today, the Government are asking everyone who pays service charges and everyone who receives them to share their views on what is wrong and how we can fix it. We want to give power back to consumers, give agents a clear and consistent framework to operate in, and give landlords, renters and leaseholders the confidence they need to know that agents are complying with the rules. As we build more homes, we need the right people to take care of them. That is why it is important that government acts to recognise what works in the sector and fix what does not.

Today’s announcement is about delivering better value and services for tenants, leaseholders and hard-working people across the country. The call for evidence, which will be open for six weeks, is the first step in creating a property management system that works for everybody. I commend this Statement to the House”.

My Lords, that concludes the Statement.

--- Later in debate ---

[Baroness Pinnock (LD)]

The noble Lord, Lord Kennedy, has accurately listed the failings of the Government in attempting to reform the housing sector, particularly for private sector tenants and leaseholders. It is very sad to see the Minister come here with good intentions which are then not carried out by the Government. As today’s Statement demonstrates, there is a long-overdue need for serious protection for tenants. Indeed, some of the poorest families in this country rely on private sector rents for their homes. Those same people are being fleeced by others who have no regard for the welfare of their tenants. That, of course, is not representative of the entire market but there is a growing number of those sorts of landlords and management companies.

Having said that, I welcome the consultation, which has been a long time coming. I want to address two issues. First, the Statement refers to leaseholds. We all know that there has been a growing trend in property development for new builds to be sold as leasehold and for the buyer, for whatever reason—there has been quite a lot of publicity about this—to find out, often too late and to his or her considerable cost, that they have signed not a freehold purchase but a leasehold purchase. I urge the Government to move quickly to fulfil the commitment they have already made to prevent this unjustifiable burden falling on the house buyer.

The service charge is another element which affects private sector home buyers. In my area a new development has an open grass area that has not been reverted to the local authority to maintain but to a management company. The home owners in that development have had huge difficulties getting any maintenance of the shared open areas. I have first-hand knowledge of that, albeit in a small way. These people can fight their corner but, for many private sector tenants, service charges cause considerable anxiety. These people may often be on short-term tenancies and can find those tenancies ended without any redress if they raise questions about the service charges imposed on them.

I assume that the Minister will have read the consultation and therefore will be able to reassure the House that evidence will be sought on transparency over service charges and on accountability and redress, and that action will follow. If I was a private tenant, I would want to know that those three elements will be addressed. I would go further: there needs to be a right in law for a tenant to withdraw payment for a charge that is proven to be unacceptable or unjustifiable without the threat of eviction or the tenancy being brought to an end in any way. I have not read the consultation but perhaps the Minister will be able to help us on that.

Lastly, the rogue landlords register, which has been agreed, is secret and is held by councils. Councils know who these rogue landlords are. If we are truly protecting tenants, we ought to follow up on the pleas from this side of the House that that register be made open and transparent so that tenants can see before they sign an agreement whether or not their landlord is on that list. I look forward to reading the document and to the Minister’s response.

[Lord Bourne of Aberystwyth]

My Lords, I will respond to the comments from the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock. First, I was somewhat disappointed in the noble Lord, who is not generally as unfair as he was today. In fact, there was not a single question in his opening statement. There were some points, which I will certainly respond to, but the accusation that we are not doing anything is, frankly, amazing and far from the truth. I will deal with some of the particulars.

First, on banning letting fees—which, it is quite true, the noble Baroness, Lady Grender, raised some time ago—very shortly we will come forward with the draft Bill to deal with this issue. On leasehold reform—long leases and ground rent charges—consultation ended only at the end of September, to be entirely fair. We are looking at that consultation and will come forward with a response shortly, and we certainly intend to act after that response. Again, there is no doubt about that. But we cannot be attacked for consultation. It seemed to me that in the noble Lord’s statement there was a suggestion that we should not be consulting on these matters. It is important that we consult. As we have only just ended the consultation, it is somewhat unreasonable to expect a response in less than a month.

On protection of client money, the noble Lord referred, quite rightly, to the notable work of the noble Baroness, Lady Hayter, and the noble Lord, Lord Palmer of Childs Hill. We have accepted that and we are carrying it forward. It is important that we are doing that. We will consult with the sector, and I am happy to meet with the noble Baroness and others to discuss that. However, of course we are carrying that forward—we have given an undertaking on it.

I will deal with some of the other issues before I come to the Statement itself, which the noble Lord did not focus on. We are looking at a housing court and are taking that forward; the Ministry of Justice is considering that issue. We are looking at a landlord ombudsman to deal with unfair practices, and we are committed to that. Social tenants are of course already subject to the housing ombudsman, and redress is already provided for with regard to letting agents. As I say, we cannot be accused of not carrying things forward. I can understand noble Lords wanting to proceed at a greater pace than perhaps has been done but we have consulted fully and are taking these things forward.

On the part of the Statement which relates to service charges in the letting sector for both leasehold and tenanted arrangements, I thank the noble Baroness, Lady Pinnock, for her welcome of it. All the major parties here have been parts of government; if this has been so urgent for so long, one is entitled to ask why something was not done earlier. We are now carrying this forward and I hope that everybody will participate in this so that we can achieve something that is remarkable in being consensual and which takes us forward. There is much to be done, this is welcomed by all of the main letting association bodies, and, clearly, there is a need to act to provide the sort of principles that the noble Baroness was talking about with regard to transparency and redress. These are important and they will be provided for, and the questions are geared in that direction, as she will see. The consultation opens today and ends on 29 November, so it is open for six weeks, and I encourage anybody who is concerned in the sector to contribute to it. Another reason why it has taken some time to address the earlier consultations is that we had over 6,000 responses on leasehold reform and over 4,700 on letting agent fees. It is important that we go through all the points that were made to come up with a reasoned response.

[The Earl of Caithness (Con)]

My Lords, I declare my interest as a former surveyor, and I have let and managed property in a previous capacity.

The Statement refers to the letting and management agents market. Can my noble friend confirm that this will also include agricultural letting agents? That also involves letting and managing property in which people live. Does my noble friend not agree that the nub of the problem, which is stated well in the Statement, is that agents do not require qualifications? Given the number of qualifications that financial agents and managers now need, it is quite wrong that any agent dealing with property is not subject to qualification requirements. Should not all agents be fully qualified, including those who buy and sell houses?

[Lord Bourne of Aberystwyth]

My Lords, I thank my noble friend for that contribution—and would indeed encourage the agricultural sector, as he indicated, to participate in relation to tenanted arrangements and managing agents in this consultation. He put his finger on the nub of the issue. Without wanting to prejudge the consultation, it is remarkable that no qualifications or training are required for this sector. These are the things, inter alia, that we are seeking evidence about and views on in this consultation.

[Baroness Grender (LD)]

My Lords, I thank the Minister for the reassurance that letting agency fees will be banned—and soon. But I know that he will understand the frustration that Members of the House have that the consultation was announced a year ago and ended five months ago. For every day that we wait, there are tenants on very low incomes who are teetering on the brink of homelessness. As the consultation paper said at the time, one in seven has to pay more than £500 in fees—which is often a burden on those with the lowest incomes, because agents tend to charge them a higher level and they tend to move more often. Every day that there is a delay on this, people are literally teetering on the verge of—and some are shifting into—homelessness. So I urge that “soon” should be not just soon but tomorrow.

[Lord Bourne of Aberystwyth]

My Lords, it will be soon. I am not sure that it will be tomorrow but it will be soon. I thank the noble Baroness for her customary patience and I understand the frustration that she must feel. She will know that there have been events over the past five months that have conspired to contribute to the delay, but she can rest assured that we are determined to take this forward. I think that she will be reassured very shortly and I look forward to talking with her and progressing this through the House.

[Lord Beecham (Lab)]

My Lords, the Statement refers to the “billions of pounds of funding for new affordable homes” that has recently been announced. I take it that that refers to the £2 billion and the 20,000 or so houses that will be built. Will the Minister indicate how that money will be allocated and where we can expect to see the new houses? Further, will he indicate whether the Government are looking at the escalating levels of ground rent that are contained in some of these long leaseholds, because recently the problem of ground rents going up very substantially over a period has been frequently raised? Finally, I refer him to a matter that has arisen in Newcastle. A charity that wanted to enfranchise a long lease was apparently unable to do so because it contravened some provisions of the Charities Act. I will send him a copy of counsel’s opinion on the matter and invite him to look at it, because it seems to be anomalous. The charity in question would have been prepared to do it but apparently was not allowed to do so by law.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord for that. He rightly identified the £2 billion of additional money that was announced on 2 October for affordable housing. We will shortly issue details of how the money will be spent. On the ground rent issue, I mentioned in relation to leasehold reform that we will be responding to the consultation very shortly and looking at banning future long leaseholds with ground rents where they are inappropriate. I am very happy to look at the Jarndyce v Jarndyce situation he referred to in Newcastle—obviously I am not acquainted with it at the moment but I will have a look at the position and would be happy to meet him to discuss it if it would be helpful.

[Baroness Gardner of Parkes (Con)]

My Lords, I declare my interest as set out in the register and will try to keep my remarks short. I think that the Minister is in need of looking at what we have thrown out that we should not have. The leasehold valuation tribunal was a way of dealing with things very simply: you could get somewhere with it. Instead, the Minister mentioned the courts. This is one of the problems. If everyone has to go through expensive court proceedings for even the most minor thing, it is very difficult.

I was not able to speak in the debate the other day and so could not draw it to the attention of the House, but the Minister does not appreciate the number of rogue and totally illegal landlords, in particular in London, which is the area I know. I have discovered that homeless people could probably get somewhere to live, but only if they are prepared to pay rent in a place where no one is meant to be subletting. Is it not time that the Minister liaised more with the local authorities and returned powers to them? That way, we would know what was happening in these properties. In extreme cases, local authorities can be told, but the homeless people I have seen have been put out because it came out that they were paying rent and the landlord was not declaring a penny of it to anyone.

I will not go on about Airbnb or holiday lets because I am always speaking about that and have a Question coming up on it. However, there needs to be consultation on many things and local authorities are the bodies authorised to do this. But when I asked in a Written Question what consultations the department had had with local authorities, the Answer that came back was none. I have tabled another Written Question to ask: why not? I could go on and on—there are so many aspects to this and I hope that the consultation period will allow us to look into these issues thoroughly.

[Lord Bourne of Aberystwyth]

My Lords, I thank my noble friend. I anticipate that she will respond to the consultation and I encourage her to do so. On the housing court, I think my noble friend is in danger of running ahead of herself. We have not published any proposals on this, as yet. We are discussing the right way forward with the Ministry of Justice. That is work in progress. On rogue landlords, this April we introduced civil penalties of up to—from memory—£30,000.

I did notice that my noble friend had put down a number of Questions on local authorities, and we will of course respond to those. At the moment, local authorities have considerable powers in relation to the sort of activity she is talking about. And I note with relief that she did not push the issue of Airbnb today.

[Lord Palmer of Childs Hill (LD)]

My Lords, I draw the attention of the House to my entries in the register of interests. I was disappointed that, in the Minister’s repeating of the Statement and his answers to the questions, no mention was made of the latest growth business. In large blocks of flats with lots of leaseholders, leases are being sold to other companies whose business it is, at the earliest opportunity, to raise the ground rent on those leases, as well as service charges and the like. This is an incredible growth business. People are buying up blocks of leases with the intention of making life more intolerable for the lessees of those apartments.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord for that contribution. As he rightly says, it is not the subject of the Statement we heard today, but I will look at that matter and respond to him. I will ensure that a copy of my response is placed in the Library and copied to all noble Lords who participated in this Statement.

[Lord Campbell-Savours (Lab)]

My Lords, I am a little confused. The noble Lord referred to a paper on leaseholds. Surely any consultation on leasehold reform should be part of a wider package that includes the area we are dealing with today. That could then be incorporated in one piece of either draft or final legislation. Should not that be the intention? At the end of the day, these discussions all end in arguments about enfranchisement, as my noble friend suggested, and the purchase of freeholds.

That brings me to my final point. It is extremely difficult for residents’ associations to gain access to the lists of leasehold owners in blocks of flats, in particular in London where a large proportion of our flats are owned by people overseas. When residents’ associations seek to gain that information from management companies, they find that they are denied access to it. That often makes it impossible for them to move forward in the whole process of buying the freehold. Why is that not being considered as part of the legislation that the Government are proposing?

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord for his contribution. On the general point about whether it is wiser to act on individual parts of the problem or wait and do the whole thing in a consolidated way in one go, I think he would probably find himself in disagreement with people who are keen to move things forward in some of the areas we have been talking about. I understand what he is saying but there is a discrete area that we have been looking at in relation to leasehold reform and houses that have been sold on very long leases with ground rents. There is a case for urgent action there before we tackle the broader issue of service charges that we are looking at here.

On the specific point that the noble Lord raises about residents’ associations, that is encompassed within the consultation. I think that he will be pleased about that. There is a general catch-all anyway. If there is a particular question that is not asked which someone feels is appropriate, there is a catch-all which provides the opportunity to respond on that as well. However, we are looking forward to hearing from people on the particular issue that he raises.

[Lord Elystan-Morgan (CB)]

My Lords, it is clear from what has already been said in this short debate that there is a crying need for the disciplines that have been adumbrated by the Minister in relation to property agents. However, that is only part of the problem. Over the past 100 years, starting with the Rent Acts immediately following the end of the First World War, various Governments have from time to time turned to the problem of housing and the relationship between landlord and tenant and come to the conclusion that it was less than equitable in the circumstances, mainly due to the law of supply and demand and social conditions at the time. We are in such a period now. There should be the widest possible review of the situation in order to bring about as much of an equitable balance between landlord and tenant as is humanly possible.

[Lord Bourne of Aberystwyth]

I thank the noble Lord for his customary perception on the importance of looking at this whole area. He is right to say that there are many facets to this—including the social rental issue, which we are looking at separately, and on which there will be a Green Paper. I accept that action in relation to the private rented sector has been done in a somewhat piecemeal way, but it is an important part of the debate. The point has been made, but it is worth restating, that the vast majority of agents and landlords are very good, just as there are very good tenants. To put it in perspective, we are dealing with a minority, but that does not mean that it is not important. I accept what the noble Lord says about the broader issues but, believe me, within the department many considerations are bubbling away. There is an active discussion about what we do next—and there is an awful lot to do—because there is the accumulated problem of a lack of housebuilding and, in all honesty, perhaps a lack of attention on some of the issues in the private and social rented sectors.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I am pleased to see the noble Baroness, Lady Hanham, in her place. We welcome what the Government are doing now because at the time of the Enterprise and Regulatory Reform Bill an amendment of ours was passed in this House to provide that letting agents should be regulated and be members of a redress scheme. The noble Baroness persuaded Ministers in the other place to accept part of the amendment, the element that provided for a redress scheme. We therefore welcome, somewhat belatedly, that the Government have come to the second part, which is that letting agents should also be licensed in some way.

My questions concern something that we got slightly wrong with the redress scheme. We included managing agents, but we now discover that management companies are not covered. It would be useful to know whether the new proposals now being discussed, which mention managing agents, will also cover property managing companies, particularly on long-lease properties. That is my specific question.

Perhaps I may repeat what I think was said at the end. I know that the Association of Residential Letting Agents and the Association of Residential Managing Agents, the voluntary professional associations, will welcome this move. It is something that they have long asked for, so they will be pleased that those who are not properly qualified and trained, and thus create a bad reputation for the sector, will now have to be included on any register.

[Lord Bourne of Aberystwyth]

I thank the noble Baroness, who I know understands the consumer sector and certainly knows this area well. I am grateful for her constructive contribution. I had not spotted that my noble friend Lady Hanham is in her place. It is a great pleasure to see her and I fully acknowledge the massive role that she has played in this matter.

On the point about management companies, the noble Baroness is right. I know something about company law and how companies are often used as a way of circumventing, sometimes intentionally and, in fairness, sometimes accidentally, obligations and occasionally rights that are bestowed. That should not be happening, so I am happy to undertake that we will look at how to ensure that it does not in this area. I also reiterate her point about the sector’s welcome for this development —indeed, the welcome it has already had. I will be getting them on to the noble Lord, Lord Kennedy, to make sure that some of that enthusiasm rubs off. It is important that we move forward together in this area.

[Lord Shipley (LD)]

My Lords, can the Minister clarify whether the scope of the Statement includes arm’s-length management organisations, which manage local authority housing? I should remind the House that I am a vice-president of the Local Government Association. ALMOs provide services to those who have exercised the right to buy, particularly in blocks of flats. I think the Statement is about managing and letting agents, but it does state that it is also about protecting consumers. The Statement says that the Government are asking everyone who is paying service charges to comment, which implies that ALMOs are included. This is a very important issue, which would benefit from ministerial clarification as soon as possible.

[Lord Bourne of Aberystwyth]

My Lords, it is important to state, as I think I have, that this is very much rooted in the private rented sector, so it is on private sector rented management agents that we are expecting contributions. However, within that there is considerable scope for people to give us their views on all the issues relating to transparency, redress and so on. We look forward to a thoroughgoing review of the sector and to receiving a considerable response by the end of November so that we can respond in a timely way. Then, with the approval and support of the House, we will work together to move things forward.

Home Ownership

Lord Bourne of Aberystwyth Excerpts

Tuesday 17th October 2017 Lords Chamber

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what percentage of the United Kingdom population own their home either outright or with a mortgage; and what assessment they have made of whether this figure may increase or decrease in future.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, in 2015-16, the latest year for which data are available, 34% of households in England owned their home outright, while 29% bought their home with a mortgage. DCLG does not hold data for the United Kingdom. After falling from 71% in 2003, the percentage has stabilised at 63% from 2013 to 2016.

[Lord Kennedy of Southwark (Lab)]

With home ownership at a 30-year low and more young people than ever before priced out of the mortgage market, is the Minister aware of the work undertaken by the Building Societies Association, which has highlighted that one in four people whose borrowing extends beyond the age of 65 is a first-time buyer? What more will the Government do to help the teacher, the classroom assistant, the small- business person, the firefighter or the police officer who in their 30s are all too often priced out of the market, particularly in London, with the various government schemes not helping to date?

[Lord Bourne of Aberystwyth]

My Lords, as I have indicated to the noble Lord, the position has stabilised over the past few years and barely changed—in fact, it has become slightly better during the past year with the percentage having fallen from 71% in 2003. The noble Lord will be aware, as the House is aware, that the Government are taking many measures to extend home ownership but also to diversify the tenure of houses—£2 billion was announced earlier this month, much of which will go on social rent. We are extending home ownership but at the same time seeking to diversify supply, because the noble Lord is right that this is a serious challenge. As he has indicated, there is a serious intergenerational problem that we wish to address.

[Lord Sharkey (LD)]

My Lords, in the last financial year, private builders built 121,000 new homes in England, housing associations built 25,000 and local authorities built 1,840. The Government admit we need to build at least 275,000 homes every year just to prevent prices rising. Private builders will not build any more than they do; housing associations can maybe build 50,000 a year—that means local authorities will have to build 85,000 each year. How will the Government enable them to raise the money to do that?

[Lord Bourne of Aberystwyth]

My Lords, as I have indicated, the Government have just announced £2 billion, and we will be shortly explaining precisely how that money will be spent. Much of it will be going on social rent. We have committed to 1 million new homes by 2020, and 1.5 million new homes—a further half a million—by 2022, which are needed to meet the challenge. It is a far better performance than we have had in recent years. There is a massive challenge here and the Government are aware of this. Part of it is also answered by something that we announced fairly recently: building homes in the right places and ensuring that more of them are built where there is the greatest need and the greatest pressure.

[Lord Tugendhat (Con)]

My Lords, for those of us who began our political careers campaigning for a property-owning democracy, the figures my noble friend has given are somewhat disappointing. It is encouraging that the Government are seized of the issue of intergenerational unfairness which exists at the moment and I look forward to the measures that may perhaps be brought forward in the Budget, but does he not agree that it is not only in respect of difficulties in buying their own home that the young are disadvantaged but in a whole host of other financial aspects, including saving for pensions?

[Lord Bourne of Aberystwyth]

My noble friend is right. The intergenerational fairness to which I referred does not apply just to housing; there is a similar issue in relation to pensions. A lot of work has been done on this, and the Government are looking at it very seriously. He is right that we need to do far more. I should point out that this is against an expanding population so, although the percentage is static at the moment, that still means we need an increased number of homes because the population is still expanding. Yes, there is a massive challenge and the intergenerational fairness issue is not limited to questions of housing.

[Lord Howarth of Newport (Lab)]

My Lords, the Minister says that the Government are seeking to diversify supply, but surely they are not doing nearly enough to increase supply. If Harold Macmillan, as Housing Minister, was able to build 300,000 houses a year in the early 1950s in a country far poorer than ours is today, why can the Housing Minister in today’s Government not do as well or better?

[Lord Bourne of Aberystwyth]

The noble Lord is right about the size of the challenge but I think, in fairness, he should acknowledge that the £2 billion recently announced begins to address the sort of issue that we are looking at. It is not about just extending home ownership, although the Government are committed to that; it is about diversifying supply, and that £2 billion, in addition to the money that is already there, will make a considerable difference.

[Lord Green of Deddington (CB)]

My Lords, does the Minister agree that we have heard an awful lot about the supply of housing, but there are also some important questions to be asked about demand? He mentioned population; 50% of the projected population growth is down to immigration and we should not be blind to that. Furthermore, of the new households created in the past 10 years, about 90% had a head of household who was born overseas. It is a big factor. We should face up to it.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, I am certainly not going to deny the population growth. The facts are there for people to see. That is undoubtedly the case. But it is not a question of simply saying that there is too much demand and we need to stop immigration. The noble Lord did not suggest that, I know, but that would not be the way of proceeding. We have all sorts of skills shortages in many parts of the economy and we have to take account of those when we plan for population growth in the country.

[Lord Shipley (LD)]

My Lords, the Minister will be aware that Help to Buy has assisted quite a number of young people to buy their first home, but is he aware of the research which now shows that Help to Buy is actually helping to increase house prices, putting home ownership beyond the reach of many more people?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord alludes to the need to ensure that younger people can buy their own homes. That is indeed very important. It is part of the intergenerational question that I referred to. The Government have many schemes that will assist people. Notably, lifetime ISAs are making a considerable difference now. Yes, it is a challenge and something we are looking at. The evidence he spoke of is actually ambiguous—it is not clear that that is the case—but we are looking at ways of encouraging younger people into the market because it is important that we do so.

Islamophobia

Lord Bourne of Aberystwyth Excerpts

Tuesday 17th October 2017 Lords Chamber

[Baroness Warsi]

To ask Her Majesty’s Government whether they have a definition of Islamophobia; and, if so, what it is.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth)]

My Lords, we are clear that hatred and intolerance against Muslims have absolutely no place in our society. Any criminal offence that is perceived by the victim or any other person to be motivated by hostility or prejudice based on a person’s religion or perceived religion is a religious hate crime. The Government do not currently endorse a particular definition of Islamophobia. Previous attempts by others to define this term have not succeeded in attracting consensus or widespread acceptance.

[Baroness Warsi (Con)]

I thank my noble friend for that Answer. He will be aware that it is 20 years since the Runnymede Trust published Islamophobia: A Challenge for Us All, which first tackled the issue of Islamophobia. Does he agree that it is high time for us to have a definition of Islamophobia? Does he agree that we cannot fundamentally challenge the hate that underpins hate crime unless we define what that hate is? Is he agreeable to meeting a cross-section of community organisations and individuals, including the All-Party Parliamentary Group on British Muslims, to come to a definition?

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, I acknowledge the massive and continuing work that my noble friend does in this area. As to her last point, I am very happy to meet the all-party group and community organisations to discuss these issues. There is a definition, as my noble friend rightly says, used by the Runnymede Trust. There are many definitions, but we do not use a single definition of Islamophobia, and I do not accept that there is a need for a definitive one. It is clearly recognised, and we have very effective monitoring of race-hate crimes. As my noble friend knows, considerable work is done by Tell MAMA and the Anti-Muslim Hatred Working Group in these areas. We do that while understanding and being able to recognise Islamophobia, but perhaps not being able to define it precisely.

[Lord Singh of Wimbledon (CB)]

My Lords, the noble Baroness, Lady Warsi, has rightly drawn our attention to the vagueness of the term Islamophobia. I add a point that concerns me: the culture of victimhood that it can easily lead to, which is not very healthy. There is also the way in which figures for crimes against other people are included in the statistics for Islamophobia—up to one-third, according to a freedom of information request. But the greatest concern is that this sort of thing does not really tackle the underlying issue of hate crime, which arises out of ignorance and prejudice. It is there at all levels of society, and we are doing very little to combat it.

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is right about the general nature of the fact that we have a considerable body of hate crime based on race, gender, religion, disability, sexual orientation, age and so on. Any hate crime is a crime against us all; that is a starting point. It is worth noting that we have some very effective legislation in this country, which is—thank goodness—very much enforced on a routine and regular basis. I do not accept that we are unable to act on this because we have no particular definition of Islamophobia. As I said, considerable and very effective work is done by Tell MAMA and the Anti-Muslim Hatred Working Group in that area. We see the results of that every day through very effective reporting and enforcing, and considerable interfaith work done by groups coming together in that regard.

[The Lord Bishop of Norwich]

My Lords, does the Minister agree that, whatever our definition of Islamophobia, one of the most effective ways of preventing it is by good relationships between the different faith communities, exemplified by the new church/mosque twinning programme promoted by the Christian Muslim Forum? That is already established in Oldham, Rochdale, Walsall and Wolverhampton. What can the Government do to encourage those local community initiatives, which can transform the way in which a local community views Muslims in their midst?

[Lord Bourne of Aberystwyth]

My Lords, the right reverend Prelate is right about the many good examples on the ground, brought about by the Christian church, in conjunction with the Muslim religion and, often, with the Jewish religion. I have seen very effective partnerships, such as Nisa-Nashim, as well as the effective partnerships through virtually all our 42 cathedrals in England, where massive good work is done. Considerable good work, probably more effective than anything, is also done by prominent British Muslims through example. I am thinking of people such as Nadiya Hussain, Mo Farah and so on, who probably do far more by example than many of these programmes.

[Baroness Farrington of Ribbleton (Lab)]

My Lords, will the Minister give the House an undertaking that, given some statements by police authorities that they are unable to cover the following-up of hate crimes because of cuts in their staffing levels and budgets, the Government will act immediately to ensure that police budgets are made up to the point where hate crimes can be followed through?

[Lord Bourne of Aberystwyth]

My Lords, we and the Home Office meet regularly with police forces to discuss these issues, and that issue has not been brought to my attention. If the noble Baroness has evidence of this, I would be very happy to look at it. Indeed, if any noble Lord has such evidence, please bring it forward, and I will certainly take a close look at it.

[Baroness Pinnock (LD)]

My Lords, monitoring hate crimes is very important, but encouraging education programmes to counter hate crime is more so. Given that local government cuts have resulted in savage reductions in community cohesion programmes and young people’s services, will the Minister agree to explore ways in which more resources could be provided to enable local councils to provide those services to encourage greater cohesion and understanding between communities?

[Lord Bourne of Aberystwyth]

My Lords, local authorities do an excellent job in ensuring that organisations such as the Holocaust Educational Trust get the message across about some of the dreadful events that have happened in the past and in ensuring that community cohesion, good interfaith relations and the importance of different religions is understood in schools. That is happening very effectively, as I see on a regular basis when I visit schools and other community organisations.

Yorkshire: Devolution

Lord Bourne of Aberystwyth Excerpts

Monday 16th October 2017 Lords Chamber

[Lord Wallace of Saltaire]

To ask Her Majesty’s Government what steps they are taking to progress devolution to Yorkshire.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, we welcome the discussions council leaders and others are having in Yorkshire about future devolution. If they come forward with a widely supported proposal for a greater Yorkshire deal involving a mayoral combined authority and not unravelling the existing Sheffield City Region deal, we are, of course, ready to progress it with them.

[Lord Wallace of Saltaire (LD)]

My Lords, 17 of the 20 councils in Yorkshire came forward, on an all-party basis, with a one Yorkshire deal earlier this summer. The Minister will be well aware of the difficulties now that Barnsley and Doncaster have withdrawn from the Sheffield/South Yorkshire deal. It has also had strong support from regional business—the Conservative Party used to be the party of business. Can the Minister tell us why the Government are giving the very strong impression that they do not support a one Yorkshire deal and why the Yorkshire Post reports this morning that a number of Conservative councils across Yorkshire have apparently now withdrawn their support for this all-party, one Yorkshire deal?

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, I know the noble Lord is very familiar with the position in Yorkshire, but I must correct him on the withdrawal of Barnsley and Doncaster, which he had inferred, from the Sheffield City Region deal. They have not withdrawn; they are not progressing the consultation, but that is somewhat different.

[Noble Lords]

Oh!

[Lord Bourne of Aberystwyth]

It is somewhat different. In relation to the existing position, it is absolutely clear, as the noble Lord indicated, that not all Yorkshire authorities will wish to progress with a deal that includes Sheffield. Sheffield City Region is split. The two larger authorities wish to progress with it; in the other two authorities, there is dissent as the noble Lord indicated. We encourage them to go ahead. The deal has been done, and people there have an expectation that it will be carried forward, and that is what we wish to see. If the other authorities want to come forward with a Yorkshire deal excluding Sheffield, we will look seriously at it.

[Lord Kirkhope of Harrogate (Con)]

My Lords, I have been involved for some time with the discussions about devolution for Yorkshire. I congratulate my noble friend and his ministerial colleagues on their patience and on their hard work with the local authorities and other interests to try to bring this about. Is it not correct that until there is consensus and a broad spread of support from cities and rural areas throughout Yorkshire, which we all know is a very fine brand, progress cannot be made? Is the Minister of the view that progress can be made if the greater Yorkshire model, which now appears to be subscribed to by most people, is progressed?

[Lord Bourne of Aberystwyth]

I am grateful to my noble friend, who knows what he is talking about in the context of Yorkshire as he has great experience. If a deal is to go forward, it will be on the basis that the existing deal, which the four constituent parts of the Sheffield City Region have subscribed to on many occasions, goes forward independently. If the other authorities—and it is for them to come together to determine this—wish to progress a greater Yorkshire deal, they can do so. If the authorities wished to combine thereafter—and that would be a matter for them—it would be possible for that to be discussed further down the line, but we have an existing deal, on which a great deal of time and energy has been expended locally and in both Houses of Parliament.

[Lord Foulkes of Cumnock (Lab)]

My Lords, does the Minister recall the discussions he and I had when he was a Back-Bencher about the need for a constitutional convention to look at a comprehensive and coherent structure of devolution for England, which would be much better than the ad hoc arrangements that are taking place, or not taking place, across the country? Will he tell the House how he is using his now great powers within government to advance that idea?

[Lord Bourne of Aberystwyth]

My Lords, I am very grateful to the noble Lord for exaggerating my powers. It is something he has done on previous occasions, and I am very grateful for that. I recall the discussions we had, but I think I was much more in receive mode than in despatch mode on those occasions. They were interesting discussions. The important point, and I am sure we both agree, is that these things have to be consensual. I am sure he will also agree that we cannot unravel agreements that have been made and on which a lot of people have expended so much energy.

[Lord Shutt of Greetland (LD)]

My Lords, I think I heard it correctly that the Minister was hinting that if there were to be a greater Yorkshire deal—which I certainly hope there is—he would like there to be a greater Sheffield deal as well, and that at some future date there could be a merger. If that is the Government’s clear view, will they shout it from the rooftops? That could help a great deal, because the people of Yorkshire want a Yorkshire deal.

[Lord Bourne of Aberystwyth]

My Lords, that last proposition is untested. There are many different things that the people of Yorkshire want. What I did say, which I will happily restate, is that it is for the people of Yorkshire to decide where this goes ultimately. We have an existing Sheffield deal which I am sure noble Lords will understand we must progress with. If the rest of Yorkshire wants to come forward with a greater Yorkshire deal, that is for them, and thereafter it will be the subject of discussions between those two separate authorities if they want to progress things further.

[Lord Kennedy of Southwark (Lab)]

My Lords, it all seems a bit shambolic. The Government are determined to press ahead with a deal that two authorities in South Yorkshire, namely Barnsley and Doncaster, no longer wish to progress with. Is there now not a case for looking again at the whole arrangement here and putting in place a deal that commands the support of all local authorities in Yorkshire, as well as the people who live there and business and civil society throughout that great county?

[Lord Bourne of Aberystwyth]

My Lords, that thesis would be all very well were it anywhere near the truth. I refer the noble Lord to the comments of the Member for Sheffield, the honourable Clive Betts, and to those of the leader of Sheffield. He will know as well as I do that this is all about a discussion—I will not push it any further than that—about who is going to be the mayoral candidate for Sheffield. That is the reality of why some of the authorities in South Yorkshire do not like it. I would encourage them to do what other political parties will be doing: select a candidate and fight those elections in the interests of that area.

[Lord Elystan-Morgan (CB)]

My Lords, will the Minister kindly undertake not to consider devolution in relation to Wales unless it is genuine and sincere? I ask that question in light of the fact that the Wales Act of this year, giving a reserved constitution to Wales, has 197 reservations, most of which are utterly trivial, and that Clause 11 of the European withdrawal Bill has the effect, majestically and imperially, of undermining devolution completely.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is very expert in constitutional matters and is asking me to range far beyond my brief on Wales and indeed more widely on Europe. These are no doubt important issues but they will be subject to much greater discussion when we look at that legislation.

Fire Safety

Lord Bourne of Aberystwyth Excerpts

Monday 9th October 2017 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, I beg leave to ask a Question of which I have given private notice. In asking the Question, I refer the House to my registered interests, particularly as a councillor in the London Borough of Lewisham and as a vice-president of the Local Government Association.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, building owners are responsible for funding fire safety measures but, where works are required to ensure fire safety, we are ensuring that lack of financial resources will not prevent them going ahead. Thirty-one local authorities have contacted DCLG. We have invited councils to provide more detail about essential works and will consider requests as information is provided. Discussions are ongoing, but we have not turned down any requests for essential works.

[Lord Kennedy of Southwark]

Since 2007, the fitting of sprinklers has been compulsory in new blocks over 30 metres tall. The London Fire Commissioner has said since the Grenfell Tower tragedy that retrofitting sprinklers,

“can’t be optional … can’t be ‘a nice to have’”.

However, the Minister’s honourable friend the Minister for Housing in the other place has been telling councils that bids for sprinklers are additional rather than essential. Does the Minister agree that it is time for the Government to reflect on and review those decisions in the light of comments from the Government since the tragedy and the advice of professionals in the fire service and elsewhere, who regard these measures as essential and not additional?

[Lord Bourne of Aberystwyth]

My Lords, the position as set out by my right honourable friend the Minister, Sajid Javid, in his letter of 31 July, where he clearly indicated that essential local work for fire safety will not be restricted by financial resources, remains the position. We are currently in discussion with six authorities, one of which, Portsmouth, has now submitted all the documentation required—it is the only one to have done so so far and we are now looking at it. There are another 35 which we are still assessing, and 31 local authorities have responded in full. If they set out essential work, we will, as indicated in that letter, ensure that the resources are forthcoming.

[Baroness Pinnock (LD)]

My Lords, I am very grateful to the noble Lord, Lord Kennedy, for asking this Question, because there is considerable concern in local authorities about funding the costs of cladding replacements. Forgive my cough; I have caught the Prime Minister’s bug. It is shocking to me that the Government are failing to take full financial responsibility for the failures of public policy, the Grenfell Tower fire being the result of those failures. I have two questions for the Minister. First, I understand that 186 buildings have failed the more stringent tests by the building research laboratories on cladding and fire safety. Will the Government publish a list of those buildings so that those of us who are concerned can see the extent of the problem? Secondly, I asked in this House on 26 June about the Government taking full financial responsibility for funding local authorities’ costs for cladding. The Minister agreed that this was an important aspect for the Government to consider. I think that he ought to consider it now and let us know that they will be funded, so that those people will be safe.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Baroness. On her first question, I will certainly revert to her and to other Peers who have participated in this debate and put a copy of the list of the 186 buildings concerned in the Library. On cladding, I come back to the central issue, the subject of the Question, which is essential works. Essential works, which might include sprinklers or might not, will be assessed by the department on a case-by-case basis. As I say, until now we have had one completed documentation, which we have just received and which we are looking at. I do not think that there is anything unfair about that. There are five further authorities that we have asked for further information; they will, no doubt, come forward with it. Each case has to be assessed on what the fire officers are recommending and what the building owners think is required; there is no standard rule. We will look at it, but I repeat the undertaking made by my right honourable friend the Secretary of State in his letter in July that we will not stand in the way of the performance of essential work because of a lack of financial resources.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, will the Minister enlighten the House a bit more about how the word “essential” is being defined? From the answer he just gave it appears that it is a very mutable concept. Will he give us some idea of what criteria are being brought to bear when determining, even if it is on a case-by-case basis, what constitutes “essential”, particularly when it appears that the consistent advice of the fire service is that, for example, retrofitting sprinklers is essential? Is its advice being questioned, or is advice being sought from elsewhere?

[Lord Bourne of Aberystwyth]

My Lords, I come back to the basic point that no application has been turned down: every application that has been made is still open and there have been 31, covering roughly 10% of authorities. We are looking at those. Clearly, “essential” is going to depend on the circumstances of each case; I do not think that I can do fairer than that. It is what is deemed necessary by the building regulators and by the owners and it will be looked at by the department. I come back to the basic point that nothing has been turned down. We remain wedded to the central concept that safety is everything and we will not allow lack of financial resources to prevent essential building work.

[Baroness Watkins of Tavistock (CB)]

My Lords, will the Minister assure the House that similar approaches in terms of financial recompense will be taken to requests regarding housing association property that was transferred from council housing structures originally? I declare my interests with two housing associations.

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness makes an interesting and fair point. The application is made separately in relation to housing associations but exactly the same yardstick is used. Once again, we will not allow financial difficulties to stand in the way of doing the essential work. I do not know of any housing association which has made an application that has been turned down. I do not think that that is the case. If I am wrong about that, I will write to noble Lords.

[Lord Shipley (LD)]

My Lords, I remind the House of my registered interests. The Minister has just said that no applications have been turned down but at the weekend it was reported in the media that Nottingham City Council’s request to install sprinklers inside flats and communal areas in 13 towers had been turned down because, according to the Housing Minister:

“The measures you outline are additional rather than essential”.


Given that there is a public inquiry and, separately, a building regulations review, if either or both of those reviews conclude that works to fit sprinklers are essential, will the Minister guarantee that the Government will fund them?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord makes a fair point. The position at the moment is that nothing essential has been turned down—I checked that with officials today. Clearly, an inquiry and a review of building safety regulation and fire safety are ongoing. It would make a material difference if one of those were to come forward with something that is essential forthwith. We will look at that situation. I do not think that is an unfair response. It is something that could happen and, clearly, in the light of changed circumstances we would have to look at that anew.

[Baroness Berridge (Con)]

My Lords, rightly, the focus has been on housing associations and social housing generally but will my noble friend the Minister assure the House that with regard to high-rise buildings that are either in shared ownership or actually in private ownership, the Secretary of State has written to those developers to check that there are not safety concerns in those blocks? Some of the fires that we have seen in other countries have been in privately owned dwellings.

[Lord Bourne of Aberystwyth]

My Lords, my noble friend makes an entirely fair point. I think that has been the subject of a letter from my right honourable friend. I will double-check that, if I may, to ensure that that is the case, and if it is not we will certainly need to pick it up.

[Lord Campbell-Savours (Lab)]

But, my Lords, there is no difference between a publicly owned block and a privately owned block. Over the months, in replies to these Questions that have been asked in the House, the Minister keeps drawing a distinction between where the work should be required by law to be carried out and it being left voluntarily to private landowners. How can the Minister carry on justifying this great inconsistency?

[Lord Bourne of Aberystwyth]

My Lords, that is not an inconsistency I have expressed. I think it must be a figment of the noble Lord’s imagination. I certainly have not said that at all. What I have said, just now in response to my noble friend Lady Berridge, is that we will look at it in exactly the same way. Anything that is essential to be done will be done. We will ensure that financial hardship does not stop that happening.

Housing

Lord Bourne of Aberystwyth Excerpts

Thursday 14th September 2017 Lords Chamber

[The Lord Bishop of St Albans]

To ask Her Majesty’s Government what plans they have to implement the recommendations contained in the Housing White Paper, Fixing our broken housing market.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, housing is a priority for this Government. We are committed to ensuring radical and lasting reform to get homes built now and in future, and are delivering the changes needed to make that happen. For example, we have already launched a £2.3 billion fund, which we committed to in the White Paper, to provide essential infrastructure to support up to 100,000 new homes.

[The Lord Bishop of St Albans]

My Lords, the consultation on the housing White Paper was published on 2 May and, as we know, it contained urgently needed measures to address the critical shortfall of housing here in the UK. When does the Minister expect the results of that consultation to be ready, and when can we expect a revised National Planning Policy Framework?

[Lord Bourne of Aberystwyth]

My Lords, the right reverend Prelate is right about the consultation. Noble Lords will appreciate that this afternoon I will say something in relation to housing need, which of course was covered in the White Paper. Meanwhile, much in the White Paper is delivered independently of the consultation. I have referred to the infrastructure but there is also the land release fund, and increased planning fees will come on stream shortly. We are analysing the responses that came in as a result of the consultation and we will come forward in response to that in due course. I thank the right reverend Prelate for the work that his cathedral does. I was there not long ago—more than two weeks ago, I should say to the noble Lord, Lord Foulkes—taking account of what was happening there and the great work that is being done.

[Lord Beecham (Lab)]

When will the Government recognise that each notion of affordability of houses for purchase or rent bears little relation to the circumstances of vast numbers of people who require new housing?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord may be aware that affordability is basically 80% of market rent. He will probably be reassured by some of the things coming forward which are to be presented in the Commons and which I will be repeating. He is obviously right that it is important that we help those people who cannot afford an affordable rent. We are doing that. We are looking at bespoke deals, for example, and we are progressing that with Leeds and the West Midlands.

[Lord Geddes (Con)]

My Lords, what encouragement are Her Majesty’s Government giving to modular housing—common in both the United States and Scandinavia—which is both less expensive and much quicker in construction?

[Lord Bourne of Aberystwyth]

My noble friend is right that modular housing is more prevalent in Scandinavia, the United States and large parts of Europe. He will recall that it was referenced in the White Paper. We are keen to progress it. It can deliver housing very quickly and more reasonably and is very adaptable. He is right to draw attention to it and the department is certainly looking at it.

[The Earl of Listowel (CB)]

My Lords, I declare my interests in property in the register of interests. Did the Minister hear this morning the survivor of the Grenfell Tower disaster, speaking three months afterwards, who is still living in a hotel with his daughter, who is going to school, still living in temporary accommodation —joining the 100,000 children in this country who are living in temporary accommodation? I welcome the Government’s work in this area but what will they do, particularly to ensure that local councils can build sufficient council housing for low-income families so that their children can thrive?

[Lord Bourne of Aberystwyth]

I did not have the privilege of hearing the contribution that the noble Earl refers to but, of course, the Government very much do not want people living in emergency accommodation. However, we understand the position of many people who do not want to move from emergency accommodation into temporary accommodation and then into permanent accommodation. It is a complex issue. In response to his broader point about the need for social housing, this is again referenced in the White Paper and we are committed to working on it. He will know that our delivery of local authority housing over the past six years bears comparison with local authority housing in the previous 13 years under a Labour Government. However, there is still much to do.

[Lord Shipley (LD)]

My Lords, I refer the House to my entry in the register of interests. Will the Minister comment on the National Audit Office report published yesterday, which finds that in 2015-16 local authorities spent more than £1.1 billion on homelessness and that more than three-quarters of this—£845 million—was spent on temporary accommodation? Is he aware that that money would have built 30,000 new affordable homes?

[Lord Bourne of Aberystwyth]

I acknowledge the work done by the National Audit Office and obviously we will consider its report seriously. The noble Lord is right that we need to ensure that money is spent on housing rather on dealing with homelessness. In short, prevention is better than cure. We are aware of that and take it seriously. However, as he will know, we are committed to 1 million new homes by 2020 and another 500,000 in the two years after that. That is a considerable increase on what we have achieved as a country over the last 10, 15, even 20 years. There is much still to do but we are getting there.

[Lord Forsyth of Drumlean (Con)]

My Lords, has my noble friend given further thought to the recommendations of the Economic Affairs Committee in its housing report? One of the largest costs of housing is the cost of land, so it was suggested that local authorities, health authorities and other public bodies which have land available for housing be given the incentive to sell it by being allowed to keep the proceeds of the sale. Further, what action will the Government take on the oligopoly which the large housing builders represent? They are deliberately withholding land to maintain the price of housing.

[Lord Bourne of Aberystwyth]

My Lords, my noble friend is right about the importance of the release of public land. As he will know, we have increased the funding on that as a result of the White Paper, and action was taken just last month. Yes, we need to look further at the release of public land. I keep trailing what is going to be in the Statement this afternoon. I will not go into the detail, but again it has provisions for dealing with the cost of land. I agree with him about land banking, which as he will recall was covered in the White Paper. We will respond on that in due course.

Local Housing Need

Lord Bourne of Aberystwyth Excerpts

Thursday 14th September 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, with the permission of the House, I shall repeat a Statement that was made in the House of Commons by the Secretary of State. The Statement is as follows:

“With permission, Mr Speaker, I would like to make a Statement on the latest stage of our work to fix this country’s broken housing market.

As I told the House in February when I published our housing White Paper, successive Governments, all the way back to the Wilson era, have failed to get enough new homes built. We are making some progress in tackling that—189,000 homes were delivered last year and a record number of planning permissions were granted. But if we are going to make a lasting change—building the homes we need to meet both current and future demand—we need a proper understanding of exactly how many homes are needed and where.

The existing system for determining this is simply not good enough. It relies on assessments commissioned by individual authorities according to their own requirements and carried out by expensive consultants using their own methodologies. The result is an opaque mishmash of different figures that are consistent only in their complexity. This piecemeal approach simply does not give an accurate picture of housing need across the country. Nor does it impress local people who see their area taking on a huge number of new homes while a town on the other side of a local authority boundary barely expands at all.

If we are going to get the right number of homes built in the right places, we need an honest, open, consistent approach to assessing local housing need, and that is exactly what we are publishing today. The approach we are putting out for consultation follows three steps. The first uses household growth projections published by the Office for National Statistics to establish how many new homes will be needed to meet rising need. I should add at this point that these projections already take account of a substantial fall in net immigration after March 2019. But this number simply shows the bare minimum that will be required in order to stand still. If we only meet rising demand in future, we will do nothing to fix the broken housing market—a situation caused by the long-term failure to match supply with demand.

So the second step increases the number of homes that are needed in less affordable areas. In any area where average house prices are more than four times average earnings, we increase the number of homes to plan for. The assessment goes up by 0.25% for every 1% that the affordability ratio rises above four. Of course, the state of the housing market means there are some areas where this would deliver large numbers that go well beyond what communities have previously agreed to as part of their local plans.

That is why the third stage of the assessment sets a cap on the level of increase that local authorities should plan for. If they have an adopted local plan that is less than five years old, increases will be capped at no more than 40% above their local plan figure. If the plan is not up to date, the cap will be at 40% above either the level in the plan or the ONS-projected household growth for the area, whichever is the higher.

These three steps will provide a starting point—an honest appraisal of how many homes an area needs. But it should not be mistaken for a hard and fast target. There will be places where constraints such as areas of outstanding natural beauty or green belt mean there is not enough space to meet local need. Other areas may find they have more than enough room and are willing and able to take on unmet need from neighbouring authorities.

That kind of co-operation between authorities is something I want to see a lot more of. To the frustration of town planners, local communities are much more fluid than local authority boundaries. People who live on one side of a line may well work on the other. Communities at the edge of a county may share closer ties and more infrastructure with a community in the neighbouring county than they do with another town served by their own council, and so on.

From talking to the people who live in these kind of communities, it is clear that they get very frustrated by plans being based on lines on a map rather than their day-to-day, real-life experience. Planning authorities are already under a duty to co-operate with their neighbours, but that duty is not being met consistently. So today we are also publishing a statement of common ground—a new framework that will make cross-boundary co-operation more transparent and more straightforward. Under our proposals, planning authorities will have 12 months to set out exactly how they are working with counterparts across their housing market area to meet local need and fill any shortfalls.

The methodology we are publishing today shows that the starting point for local plans across England should be 266,000 homes per year. Nationwide, this represents a 5% increase on the upper end of local authority estimates, showing that the local planning system is broadly on target. For almost half of the authorities we have data for, the new assessment of need is within 20% either way of their original estimate. Nearly half—148—actually see a fall in their assessment. They go down by an average of 28%. In the 156 areas where the assessed need increases, the average rise is 35%, but in most cases the increase will be far more modest: 77 authorities see an increase of more than 20%.

We are not attempting to micromanage local development. This is not a return to Labour’s ineffective and unpopular top-down regional strategies we abolished in 2010. It will be up to local authorities to apply these estimates in their own areas; we are not dictating targets from on high. All we are doing is setting out a clear, consistent process for assessing what may be needed in the years to come: how to meet the need, whether it is possible to meet the need, where to develop, where not to develop, what to develop, how to work with neighbouring authorities and so on remains a decision for local authorities and local communities.

But new homes do not exist in a bubble. New households need new school places, new GP surgeries, greater road capacity, and so on. That is why, earlier this year, we launched our new housing infrastructure fund. Worth a total of £2.3 billion, it ensures that essential infrastructure is built, alongside the new homes we so badly need. We will also be exploring bespoke housing deals with authorities that serve high-demand areas and have a genuine ambition to build. We are also providing further support to local authority planning departments, with a £15 million capacity fund.

So those are our proposals. But past experience tells me that, as soon as I sit down, the right honourable gentleman opposite will leap to his feet, bang his fist on the Dispatch Box, and tell us that today’s announcement is not enough, that it will not get homes built—and he will be absolutely right. These measures alone will not fix our broken housing market. I make no claim that they will. As the White Paper made clear, we need action on many fronts. This new approach is one of them. On its own, it will simply provide us with numbers. But, taken with the other measures outlined in the White Paper, it marks a significant step in helping to meet our commitment to deliver a million new homes by 2020 and a further 500,000 by 2022.

It is so important that we fulfil that commitment, because the young people of 21st-century Britain are reaching out, in increasing desperation, for the bottom rung of the housing ladder. For the comfortably housed children of the 1950s, 1960s and 1970s to pull that ladder up behind them would be nothing less than an act of intergenerational betrayal—one that our children and grandchildren will neither forget nor forgive. If we are going to avoid that, fix the broken market and build the homes the people of this country need and deserve, we must start with an honest, open, objective assessment of what is needed where. Today’s publication provides the means for making that assessment, and I commend it to the House”.

--- Later in debate ---

[Lord Shipley (LD)]

My Lords, I remind the House that I am a vice-president of the Local Government Association.

It is good that councils will be undertaking a more accurate assessment of housing needs in their area and working across boundaries with neighbouring authorities—perhaps better than occurs in some places. The further support through the capacity fund is welcome, although I suspect that it may prove not to be enough, but no doubt the Government will keep that under review.

The Statement goes so far but when it says that,

“we need a proper understanding of exactly how many homes are needed and where”,

there is something missing. We need to know also what tenure they ought to be. Are they for sale, and at what kind of price range? Are they for rent? Are they to be affordable or are they to be homes for social rent? A major failing in the Statement is that it does not address the issue of finance. I will come back to that in a moment.

I am interested, if the Minister happens to know, in how much the expensive consultants using their own methodologies have actually wasted. Presumably there is a figure in the department which would indicate to us how much money has been spent by consultants who are not using common methodologies. It should be a matter of concern if public money is being spent for purposes that may not be giving us a clear result. But the Statement ends by saying:

“The result is an opaque mishmash of different figures that are consistent only in their complexity”.


We need to know more about that, because the figures that are being used for planning purposes need to be reliable.

Perhaps the Minister will explain why the four times average earning planning figure is being used rather than some other number. Presumably it has been carefully worked out but another number could be more appropriate. The Government may find that they need to keep under constant review whether the three stages of assessment are actually working. They may do, but the consultation will reveal whether or not they actually do.

Is it necessary for planning authorities to have 12 months,

“to set out exactly how they are working with counterparts across their housing market area”?

In some cases they already are; in other cases where they are not, they should be doing it a great deal more quickly than in 12 months. If there was to be a faster figure, I would want to support that.

The Government have come out with the figure of 266,000 homes per year as the starting point for local plans across England. I just draw the Minister’s attention to the report by the Economic Affairs Committee of your Lordships’ House, which said that it should be 300,000 a year—after a great deal of work. Perhaps the Minister could explain whether 300,000 is the Government’s target. Presumably, to hit 1.5 million over five years, as the Statement also indicates will occur by 2022, it is closer to 300,000 a year. Unless the financial arrangements are sorted out to enable local authorities and others to build, particularly for social rent, a problem is going to arise because I do not think you can build 1.5 million houses to sell. Whether it is for a form of shared ownership or whatever, in the end we simply need more social homes for rent.

The Statement makes it clear that:

“These measures alone will not fix our broken housing market”.


That is absolutely true. But the Statement does not go on to tell us why that is. But the reason is because the financial arrangements are not in place to do it. Earlier today in Questions, I cited the National Audit Office report on homelessness, which cost local authorities £1.1 billion in 2015-16. That would have provided 30,000 new affordable homes—not necessarily homes for social rent. It is clear to me that the broken housing market will not be fixed only through changes to the planning system. The root of the problem is that the cost of renting is too high and not enough social housing is being built. The Government are at serious risk of not delivering the 1 million new homes by 2020 and the further 500,000 by 2022.

Finally, the Minister said a great deal about the regional spatial strategy. There were problems with the regional spatial strategy, but it was not quite as bad as the Statement made out. This new approach may be better, but it is still slightly top-down. I draw the Minister’s attention to a report published recently by Homes for the North, which looks at a regional approach to the provision of housing and identifying housing need. What is particularly interesting in its statement that 500,000 homes are needed over a 10-year period across the north of England is that the work is being done in conjunction with Transport for the North; in other words, there is an integrated planning system, not officially in place but unofficially in place, which I think is going to help identify need. If the Minister has not read the report, Future Housing Requirements for the North, I hope he will endeavour to do so.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lords, Lord Kennedy and Lord Shipley, for their contributions. The noble Lord, Lord Kennedy, was keen to tell us that he was not going to bang on the Dispatch Box but then went for a metaphorical bang on the Dispatch Box before he got out of his first sentence, I think, on the Housing and Planning Act 2016, which is a routine approach of his, I know. I take issue with him on the housing White Paper. This was widely welcomed, including by many people in the Labour Party, certainly in the other place, as being radical and forward-looking. I am not sure I would go along with his uncharacteristically churlish approach. I also remind him that 333,000 new homes have been built since 2010. On the local authority housing situation, as a Government or as part of a Government in the past five years, we have built more than double the amount of local authority housing that Labour did in 13 years. We all have challenges to face but these are irrefutable facts.

I remind noble Lords that this is a consultation. This is not the definitive word. We are opening this for consultation and the consultation is open until 9 November. I do not want to say, “This is definitely what we are going to do”. We are consulting on many of the issues that noble Lords have understandably raised. The noble Lord, Lord Kennedy, asked when this would take effect. I appreciate that there is a lot to take in in the documents but we have indicated that 1 April 2018 is the date we are looking at, or later if the National Planning Policy Framework is altered. It is whichever of those two dates is the later but of course we will want to take account of the consultation, which is not ending until nearly halfway through November. I am sure noble Lords would expect us to do just that.

The noble Lord, Lord Kennedy, also asked about what happens if local authorities do not agree with that approach. Let us presume that it goes forward after consultation in a very similar form—though, as I say, the consultation is open. If the local authority does not like a particular figure, or wants to revise it because of green belt or an area of outstanding natural beauty in its area, the policy will then go, in the normal way, as in every case, to examination by the planning inspector, who could disagree with it. That decision will be the definitive decision unless there is judicial review, if the planning inspector misdirects himself in law. There is a process there for independently ensuring that the agreed figure is carried forward.

I thank the noble Lord, Lord Shipley, for his comments on common ground and working across boundaries in the housing market areas. He questioned why the period is 12 months. I anticipate that some local authorities will say that the objective is challenging. Although we are always tempted to go more quickly, some local authorities may have not one, but various, boundaries to cross, perhaps working with other authorities to the east, west, south, and so on. It may be a taller order than is immediately apparent.

The noble Lord, Lord Shipley, also raised the issue of consultancy costs. Our workings on that show that, on average, each local authority is spending around £50,000 on consultancies. We are not suggesting that that is wrong—certainly it is intra vires within the present system—but we think that the system we are recommending will be simpler and not need those consultancies, because it will essentially be a mathematical formula. I am not suggesting that that money has been illegally spent, but it could be saved. We are proposing a uniform approach. I do not think it is top down in the way that was suggested, in the sense that we will still be giving local areas key decisions on whether to disagree with the approach, and so on. Nevertheless, it will provide a uniformity of approach. Four times average earnings is a formula we have adopted, but the consultants at the consultation may throw up other suggestions.

The noble Lord referred to our existing targets and suggested they are challenging. I accept that they are: 1 million new homes by 2020 and 1.5 million, so another half a million, between 2020 and 2022. Those will not all be homes to purchase—I correct the noble Lord on that point—some of them certainly will be for rent. The White Paper refers to the need to get the social housing sector moving as well. We are of the view that this needs a mixed approach. The figure of 266,000 may well be exceeded. We may find—we hope—that some local authorities will want to go further. They will have to justify that again when the plan goes for examination, but they could well go further, so this figure would therefore be a baseline.

The noble Lord, Lord Shipley, also referred to other issues that should be integrated. I fully accept that, and we expect to work alongside the national infrastructure framework and the £2.3 billion that we have allotted to help achieve that. I think I have covered the points that the noble Lords raised but, as always, I will write to them after the Statement concludes to pick up any points I have missed and perhaps to answer any detailed questions.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

I thank the noble Lord, Lord Best, very much for his contribution and I welcome the work that he does in this area. He set out two anxieties, the first of which was affordability. The fact that in the formula we are looking at the areas where prices are highest and affordability is a real issue—and putting an additional obligation on those areas to deliver more housing—should have a beneficial effect on prices in those areas. I agree that that could be exaggerated but, nevertheless, it will put some downward pressure on prices.

The second issue that the noble Lord raised was quality. I very much agree with what he said, and perhaps it is a point that I should have addressed earlier. This House has taken a particular interest in quality and design—and I think of the response that I gave in a debate on a Select Committee report on this very issue led by the noble Baroness, Lady Andrews. We are seeing what we can do within the department to mainstream design much more as an important part of the process. It is important.

The other thing that I should have picked up in response to the noble Lords, Lord Kennedy and Lord Shipley, is planning committee fees. In addition to the money that we talked about in the Statement itself we will soon bring forward an SI on the 20% increase in planning fees. In the consultation there will also be, as noble Lords will see when they read it, an additional 20% on those authorities that deliver the housing set out in their housing need targets. That incentivises it, and of course that money must be ploughed back into the planning department; that is one of the attached conditions. I am sure that that will be beneficial too.

[Baroness Donaghy (Lab)]

My Lords, I welcome the Government’s intention for there to be an open and honest approach. As part of that, it is important that we all accept that successive Governments have not succeeded on the issue of housing for our country.

I was disappointed that so much was made in the statement about the record number of planning permissions. We all know how meaningless that is. There is already a mountain of planning permissions that have not been acted on. However, I am interested in the steps in the consultation. If the first two on the household growth projections and increasing homes in less affordable areas are carried out—one on accuracy and one on building homes in areas of real need—they will be very good steps indeed. I will ask a little more about the third step, which is setting a cap on the level of increase that local authorities should plan for. I was not quite clear what that meant for existing local authority planning.

I will ask a bit more about what plans the Government have to enable more local authority housebuilding. It may have more than doubled, as the Minister said, but it has probably more than doubled from a pretty pathetic figure. Enabling local authorities to expand any housebuilding projects would help enormously.

My final point is about the construction industry, which has not been mentioned. It is going through some relatively bad experiences, certainly outside London. Balfour Beatty has been making hundreds of very experienced construction workers redundant. I know the housebuilding sector is rather different from some of the very big construction companies, but I wonder whether the Government are in consultation with those construction firms to ensure that they are around and able to build these houses, and that their workers are in the right place to help build them.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Baroness, Lady Donaghy, for her characteristically honest and candid contribution on the shared blame we all have relating to the problems we face and why we must all move forward together. As she rightly said, this is about seeking to build more in less-affordable areas. As I said, that should have a beneficial effect in those areas, particularly for people struggling to buy. As I said, the cut-off date for existing local plans is that if they have gone in before 1 April 2018 they will not be subject to the new, consulted-on regulations. That is the cut-off deal.

The noble Baroness referenced the need for more local authority building. I agree. She will know, and I think I mentioned this previously, that we are seeking to do bespoke deals with authorities up and down the country. We are in discussion with many authorities. We are certainly at a fairly advanced stage with Leeds and the West Midlands, but there are others.

The noble Baroness then mentioned the construction industry. Obviously we consult it, particularly on employment issues and the impact of Brexit on the workforce, where we have concerns, as set out in the Farmer review, which was an independent review but commissioned by the Government on the industry. It is something we look at very closely and we are in discussion on a regular basis with developers about the industry’s needs.

[Lord Filkin (Non-Afl)]

My Lords, I warmly welcome the Government’s commitment to radically increase the supply of housing. I declare two interests as chair of the Centre for Ageing Better and as a member of the Intergenerational Commission. The problems of insufficient housing are borne by both ends of the spectrum. Younger people face significantly higher housing cost and significantly lower quality of housing because we have failed to build enough housing in the last 20 years. The greatest growth in the number of households and the percentage of households is in people aged 65 plus. Clearly, the housing White Paper makes some reference to this, which is welcome, but there is an urgent need to recognise the importance of the million new homes, many houses being provided that are suitable for older people or people as they get older, and ensuring a supply of suitable accommodation for people to move into in urban and rural areas as they wish to adopt more suitable housing for their later years. What will be done about this?

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord very much indeed for that contribution. I reiterate the point he quite rightly made that this is about cost, but we must also have regard to quality. He refers quite rightly to the great growth in the housing needs of people aged 65 and over, not least because people, thankfully, are living longer. Their needs will be very different as they age. He will recall that on the then Neighbourhood Planning Bill there was discussion on this, prompted initially by the noble Baroness, Lady Greengross, I think. As a result of discussions on that, the Government were keen to ensure that we placed an obligation in the National Planning Policy Framework relating to elderly housing, which has been taken forward. It is very much at the forefront of our thinking and therefore places an obligation on local authorities to make provision for that age group when they present their plan.

[Lord Greaves (LD)]

My Lords, the Government’s mantra is that the housing market is bust—they say broken, I say bust. The truth is that the local planning system is bust, very largely due to the cost and complexity the Minister referred to of producing local plans. He is really blaming local authorities for this—I declare my interest as a member of a district council in Lancashire—but all the councils are doing in producing these local plans, using expensive consultants and producing incredibly complex documents, is following instructions from above and doing what they are told to do, and how they are told to do it, by the Government.

The Statement says:

“We are not attempting to micromanage local development … It will be up to local authorities to apply these estimates in their own areas—we are not dictating targets from on high”,


unlike the old regional spatial strategies, but this is exactly what the coalition Government said when they introduced the present system six or seven years ago. It has not worked out like that. The truth is that the numbers that come out are effectively dictated from on high by the rules and regulations laid down. It seems this will be just the same.

Will the Minister give a bit more detail about the relationship between this new system when it comes in, which presumably will be next spring some time, and the existing local plans that have been adopted and the local plans and core strategies going through the system in different local authorities? The Minister said that if a local plan is in existence before 1 April 2018 it will not be subject to these new numbers, but will the new numbers still apply when people apply for planning permission for new developments over and above the numbers in the adopted core strategy or the adopted local plan? What about areas where numbers would go down when local people and perhaps the local authority quite reasonably expect to be able to resist applications for planning permission on the basis of new numbers, even if numbers have been set out or land allocated in their local plan?

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord, Lord Greaves, very much for that and give him this assurance: I certainly was not blaming local authorities. I went very much out of my way to say that action was being taken on the system as it was and that it was intra vires their powers. As I have been at pains to say, successive Governments have brought us to the position that the market is broken—bust, as they apparently say in Pendle. It is right to say we are going for a uniform approach, as he indicated, but issues about where the housing goes and the type of housing is a matter for the local authority. We seek to set out a framework here and we are of course consulting on it.

Regarding the dates for when this comes in, if there is an existing plan as of now or an existing plan goes in before 1 April 2018, or later if the national planning policy changes later than that date, that plan is the valid one until it runs its life. New ones will come in and take over from the old plans.

In relation to the issue of some authorities wanting to be or being in a position where, on the formula, they will require less housing, if they want to go further than that then of course the Government will be delighted, but they will need to justify that to the Planning Inspectorate on examination. Once again, that will be an independent process. That is the essence of what we are consulting upon but, as I say, we are very much open to this discussion, which will end on 9 November.

[Lord Kerr of Kinlochard (CB)]

I thank the noble Lord for the Statement. I admire his expertise on the subject—I admit that I have none. I welcome the Statement to the extent that I understand it and as far as it goes. I am a member of the Economic Affairs Select Committee under the noble Lord, Lord Hollick, which produced the report referred to by the noble Lord, Lord Shipley. The two things that struck me most in that exercise were that, first, if one approaches the problem from the basis of the crying need for more social housing, it really is necessary to allow local authorities to borrow to build and that, secondly, if one approaches it looking at the development by the private sector, one really has to think of a way to tackle the problem of three-quarters of a million permitted houses not being built. The big developers were very clear that their business model does not depend on land banking. Yet their results are very good at the moment and the markets might well think that they are doing pretty well on large land banking and not building the houses for which they have obtained permission. As we approach the budget season, can the Minister talk to his colleagues in the Treasury about the possibility of incentivising, taxing or penalising builders to build the houses for which permission has been obtained?

[Lord Bourne of Aberystwyth]

I thank the noble Lord for the reference to the excellent report from the committee chaired by the noble Lord, Lord Hollick. The Government are of the view that there is sufficient headroom on the borrowing at the moment which is not utilised, so there is no need to look at the cap. There are considerable reserves held by local authorities as well. Obviously this is something that we review but, just at the moment, there does not seem to be any need to move on that.

The noble Lord, Lord Kerr, also referred to the issue of land banking, which I think also came up in an Oral Question today. Obviously it is something that was tackled and mentioned in the White Paper; we are analysing the responses and will come forward following the consultation on that. I am very grateful to him for exaggerating my powers with the Treasury, but I think that that will be a matter for my right honourable friend the Secretary of State. It is obviously an option that is canvassed and talked about, as we certainly want to encourage builders to ensure that we do not need to take that action by not sitting on great reserves of land.

[Lord Young of Norwood Green (Lab)]

My Lords, I was not intending to enter this debate but I want to make a couple of comments. On the point that was just made about local authorities apparently having enough reserves to build more social housing, even if they do, all those properties—given the Government’s formula—eventually become subject to the right to buy. They come back on to the private market and their prices rise to meet whatever the local circumstances are. If we look at the situations in some local authorities, the right to buy has become the right to buy to let for about 50% of those properties, with very large rents and a huge amount of housing benefit going to these private landlords.

What is the Minister’s view about the developments going on in a number of places? I read recently that, in Hackney, they are using what they call a community land trust, whereby the house may pass on but the land remains in the control of either the community or the local authority. Is this a way forward? It may not solve all the problems but it seems to me that it has a real contribution to make. Are the Government considering ways of encouraging this approach?

[Lord Bourne of Aberystwyth]

I thank the noble Lord, who I know has considerable expertise in this area. I am glad that he decided to contribute. He will know that we are looking at bespoke deals on social housing and a diverse range of ways to deliver housing—I have mentioned Leeds and the West Midlands, for example. I am aware of the community land trust option; I think it is an interesting one and, given that we are going for a diversity of approach, I am sure that in some situations it is entirely appropriate. It will be interesting to see where else that is being followed.

We are in close discussions with the London mayor. My right honourable friend the Secretary of State met him last week—there is a good relationship there. They discussed London’s needs on housing and, of course, we delivered a record-breaking settlement with the mayor of £3.15 billion, so much is being done in London. We accept that there is a great challenge on affordability—as well as design, which has been referred to—and we are grappling with this. I hope that noble Lords will agree that this Statement offers a way forward. It does not solve the crisis, as we are very keen to say, but it is an important contribution to it.